I've been an entrepreneur for as long as I can remember. As a kid, I started selling cool rocks even before I sold lemonade. At age 8, I hired my two friends to deliver newspapers and gave them 75 cents a day, and I kept 25 cents. I've gone on to start much larger companies, divisions within companies, both within the US and outside, that have led to both success and failure. Venture backed, partnerships, bootstrapped, high growth, retail, commercial real estate, technology, energy, B2B, B2C, B20 - nobody is there to buy) and more. I’ve learned my greatest life and business lessons from my failures. I recently completed a book for Wiley & Sons, entitled The 7 Non Negotiables of Winning: Tying Soft Traits to Hard Results, which you can read about here: http://www.7nns.com. My current company, Fishbowl, is a culmination of everything I’ve learned over my 30-plus business years.

The 5 R's For Building Lifelong Relationships With Employees

Employees are willing to commit to a company that is also willing to make and keep its commitments to them.

In response to my article “10 Reasons To Stay At A Job For 10 Or More Years,” some people expressed fear that if they work hard and stay at a company faithfully through good times and bad, when it comes right down to it, they still might be expendable at the first sign of revenue stress. Some worry they’ll never be as valued or as well-compensated as newer employees. They believe the only way to significantly increase their wage is to “job hop” and hope for the best someplace else.

How can employers resolve these concerns? How can we, as employers, demonstrate that we are as dedicated to our employees as we hope they’ll be to us? Today I present to you a list of five “R’s” to cover the Requirements (sorry, I couldn’t resist) you can fulfill to give your employees a greater level of assurance about their commitment to stay. Here they are:

Responsibility

Show your employees you trust them by giving them responsibilities that truly empower them and that allow them to grow and feel like an important part of the company. Encourage them to gain new skills, competencies and capacities by hiring from within wherever possible and by giving promotions at appropriate times.

Respect

Employees want to know they are respected as people and that their contributions are appreciated. If you treat their work lightly or fail to acknowledge them because you’re too busy or distracted with your own concerns, they’ll likely start to feel dissatisfied and will start to look elsewhere for the respect they’re hoping to find. Every single employee should be treated with respect. This doesn’t mean that their behaviors or output is always respected—but the respect you hold for that individual and their unique talents should always be clear.

For example, one regional CEO made a practice of berating his employees in front of clients without warning in an attempt to impress clients with his disdain for the slightest slip in performance. In conversations with other executives, he regularly referred to his employees as “the worker bees.” Not surprisingly, turnover became rampant for his company and many have fled.

In contrast, another CEO, while walking past an elevator with his board of directors, noticed an employee in the elevator who had come to work, but was clearly feeling bereaved about a family concern. He stopped the conversation, left his directors, and took the employee’s hand in both of his while he expressed his sincere compassion for the individual, and then made sure the employee was fully taken care of before moving on. That company, not coincidentally, has extremely low turnover and is one of the top revenue-producing firms in our state.

Revenue-sharing

Tie a part of your employees’ wages to the company’s performance. Offer a base pay and then add a part of the company’s revenue and/or profit on top as a performance bonus. This will not only motivate the employees to work hard, but will align their interests with the company’s revenue and profit goals and will serve as an incentive to stay with the company as it grows. The employees feel much more engaged and part of the company in this model, which is not far behind ownership of the company itself.

For small businesses with high growth potential, this is an effective way to attract top talent without breaking the bank. It’s also a good way to weather financial storms and to reward employees generously when times are good. By making the fixed cost of payroll inherently more variable under differing business conditions, you can make your company more resilient and agile while also treating your employees exceptionally well.

Reward

Reward is similar to Respect and Revenue-sharing, but it goes beyond monetary rewards. Those elements are definitely important as ways to show gratitude for employees’ hard work. However, other kinds of rewards, such as recognition in front of the company, company parties, department parties, family events, employee of the month awards, free lunches with the boss, gift cards, company logo clothing, thank you cards, flowers and support as employees have babies, adopt children, or do something good in the community, etc., help to contribute to the positive culture of the company and can be good morale builders, as well.

Relaxation Time

Be generous with time off. Don’t go overboard, but make sure your employees have sufficient time for sick days, family vacations, new babies, etc. Remember that it’s their jobs that enable the company to grow, but also remember to allow your employees to enjoy their lives during the time they’re outside office walls. There are many more important roles for your employees than their work-related positions, and they need to know that you honor and value those priorities as well.

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Once they were ordinary things in Japanese company. But you American denied such Japanese management style. Buy why do you recommend now? I believe employees and employers are just like families. Both of them should have same aim, and employers should not forget they can’t realize their management without employees’ support. When employees feel of participating for company’s operation, they can get much more than their salaries. It is same as the proverb that people don’t live with bread alone.

There is much American business can learn from the Japanese management style. You are absolutely right, to be successful companies should never forget the vital importance of having their employees support. The loyalty should be equally strong in both directions. Thanks very much for your note! Regards, David

PS Izumi, We have a mantra at Fishbowl which is: “We are in the People business, we just happen to make killer software….” If all employers would behave, demonstrate in word and deed, how valuable and how much they care for their people, then their people respond in extrodinary ways. I agree with you that the “American Way” is not this way in many companies, but we will are getting better. This last economic blow will seperate the wheat from the chaff and I hope and pray that American business does treat their people the way of the Japanese

I would add one more “R”, retirement. The employer can inexpensively hold seminars or hand out or suggest self-help books such as “So You Want To Be Taxed As A Millionaire” or “Retire Independently, Retire Without Social Security” to assist employees in saving for retirement and money management. Such action displays care and concern for the employee and his/her future and can be a bonding precess.

PS Richard, we have allocated 30 percent of our company to stock options for this very reason….for those who “retire” can have enough to live on without the need to have outside support. We can’t count on what the future holds, so we are taking hold of what we can for out people for the long run. We have a 100 year plan and that is to take care of our people, working or not, for 100 years and beyond.

It’s truly life changing to work for an employer that is committed to me – and an incredible concept to teach – thank you Dave.

I feel like the connection between employer and employee seems to behave like any relationship. If both sides are committed to the relationship through thick and thin then everything around the relationship automatically strengthens it and hard times bring them together, whereas if both like to shop around there is little that reinforces their connection to each other and hard times tear them apart. This “through rich or poor” level of commitment seems to work best when the employer reaches out first (typical American business hierarchy is a substantial barrier for an employee to extend the hand of commitment across).